CHAPTER 5
HARMING OUR HEALTH

Licensing of health care services gives us the illusion that we are protected against selfish others who would defraud us. Instead, our aggression boomerangs back to us, costing us our wealth, our health, and our very lives.

We've tolerated, even encouraged, the aggression of some licensing laws. We believe that they protect us from selfish others who would otherwise give us low-quality service, especially when a mistake can be deadly. The available evidence, however, suggests that our aggression in the form of licensing laws hurts us, rather than helps. Quality is most often compromised, not improved, by licensing laws.

To understand how this happens, let's review what we know about the impact of licensing laws. Licensing always lowers the number of service providers by imposing extra requirements, such as citizenship, schooling, monetary payments, or apprenticeship for those wishing to create wealth. In the previous chapter, we saw how licensing limited the number of taxi drivers and home child-care providers while increasing the prices charged by those still legally permitted to create wealth in those professions. Studies show that whenever the number of service providers goes down, more people, especially the disadvantaged, either do without the service or do it themselves. For example, when the number of plumbers decreases because of licensing laws, retail sales of plumbing parts go up as people attempt to make their own repairs. Dental hygiene is poorer in states with the most restrictive licensing requirements for dentists, because fewer people can afford regular checkups. For the same reason, the incidence of blindness increases in areas with the most stringent licensing for optometrists. Accidental electrocutions go up when licensing requirements for electricians increase. (1) Licensing laws intended to protect us can- and do- kill.

By limiting availability, licensing laws lower the overall amount of quality service delivered. The negative impact of decreasing availability far outweighs any increase in quality that may occur, as the above studies indicate. Evidently, few people attempt to do work for which they are totally unqualified. Licensing laws prevent many more people who have some qualifications from performing simple services at affordable prices. The observation that licensing laws lower the overall quality of services delivered takes on a very personal meaning when we realize that one of the most highly regulated (licensed) sectors of our economy is the health care network.

For most of us, state-of-the-art knowledge of how to stay well and get well will be the primary factor in determining how long and how well we live. Licensing limits the availability of a service, thereby lowering the overall quality delivered. Thus, we would expect our health care to be of substantially lower quality than it could be in the marketplace ecosystem undisturbed by our aggression. Let's examine two major aspects of health care regulation- licensing of physicians and pharmaceuticals - to see if we have chosen a cure that is worse than the disease.

The Marketplace Ecosystem: Honoring Our Neighbor's Choice

In the mid-1800s, doctors learned their profession in medical schools, by apprenticing with another practitioner, and/or by developing their own therapies. (2) Many individuals limited their practice to specific areas, such as midwifery, preparation of herbal remedies for common ailments, or suture of superficial wounds. This diversity in the training and type of practice encouraged innovation and allowed individuals to patronize the health care provider who seemed best suited to both their needs and their pocketbooks. Good healers were recommended by their clients, while those unable to help their patients soon found themselves shunned. Physicians reaped as they sowed. The patients voted with their dollars, thereby regulating the quality of health care. The customer was king.

Aggression Disrupts the Marketplace Ecosystem
Lowering Quality

As long as health care providers did not lie about their qualifications and past successes, the marketplace ecosystem evolved a natural balance. Some individuals, however, misrepresented their skills to attract patients. By lying about their expertise, they disrupted the marketplace ecosystem with the aggression of fraud. Patients who entrusted themselves to such individuals sometimes risked their very lives.

Americans were in a quandary. They wished to continue to honor their neighbor's choice but didn't know how to deter aggressors. Had they understood the other piece of the puzzle- the power of having aggressors compensate their victims- as described in Chapter 13 (The Other Piece of the Puzzle), the balance of the marketplace ecosystem would have been rapidly restored.

Unfortunately, even today the powerful impact of this second principle of non-aggression is not recognized or understood. In Part III (As We Forgive Those Who Trespass Against Us: How We Create Strife in a World of Harmony), we'll learn more about this principle mes how its application would have defused the practice of medical fraud. For now, however, let's focus on the high price Americans paid by choosing to fight aggression by becoming aggressors themselves.

By the early 1900s, every state had agreed to the aggression of physician licensing. To obtain a license, healers had to meet the requirements of the licensing board. Without permission to practice, they would be stopped- at gunpoint, if necessary- from treating patients who still wanted their services. If our neighbors didn't choose as the licensing board did, their choices would no longer be honored, even if the unlicensed healer could cure them! (3) The consumer was no longer king; the licensing boards were.

The licensing boards in each state soon began refusing licenses to health professionals who had not been trained at one of the "approved" medical schools. Only half of the existing medical schools were approved, so most of the others had to close their doors by 1920.4 By 1932, almost half the medical school applicants had to be turned away.5 Those who apprenticed, went to unapproved schools, or developed their own therapies were stopped- at gunpoint, if necessary- from healing.6 As a result, the number of medical doctors per 100,000 people dropped from 157 in 1900 to 125 by 1929. (7) Specialists, such as midwives, were usually forbidden to practice unless they had a full-fledged medical degree. (8)

As medical knowledge expanded, a smaller number of physicians were available to perform an ever-widening range of services, so that the shortage created by licensing became even more pronounced. Just as more people die of electrocution when licensing requirements restrict the number of electricians, the decreased number of physicians in the early part of this century almost certainly resulted in poorer health care, especially for the disadvantaged.9 Until 1970, the physician to population ratio remained below what it had been in the early 1900s!7 By 1985, this figure had risen to 230 per 100,000,10 but the time required for each patient had dramatically increased as well because of a more extensive array of procedures, preventative annual physicals, and more involved diagnostic procedures. Naturally, with more work and fewer physicians, the price of medical care soared.

One measure of the doctor shortage is the average work week, estimated at 60 hours for practicing physicians and 80 hours for those in training. (11) Because of their fewer numbers, physicians today tend to see a whirlwind of patients in their long working hours. A transplant surgeon with whom I was collaborating once asked why I had elected research instead of medicine. My reply, only half-joking, was that I was unable to function competently after 48 hours without sleep. He admitted in all seriousness that one needed such an ability to get through hospital training and to practice in the more demanding specialties such as his own.

Such a long workweek can result in serious oversights. My own mother, in her late fifties, went to her doctor with a small breast lump. The doctor, although aware that five of her relatives had died of cancer, did not even order a mammogram. Embarrassed by the professional brushoff, my mother did not confide in anyone until the tumor was unmistakable - and had just begun to metastasize (spread). A few short years later, my mother drew her last breath.

The saddest part of this story is that it is not unique. My mother's best friend and my own ex-mother-in-law had almost identical experiences and met the same premature fate. Another friend survived a rapidly growing oral cancer only because his dentist insisted on its removal in spite of his physician's advice to "wait and see."

Only heart disease kills more Americans than cancer. (12) Any practicing physician can certainly identify it if he or she takes the time and trouble to investigate. Were the doctors whom my family and friends visited just too harried to provide that care? Is physician overwork causing major medical mistakes?

Some Californians think so. In 1990, they attempted to pass a law stopping the hospital physician- at gunpoint, if necessary- from working longer than 80 hours a week! (13) More aggression is not the answer, however.

Inhibiting Innovation

Shortages and erratic care are only the tip of the proverbial iceberg. Quality care is compromised in ways other than restricting the number of physicians. By determining who can practice, the M.D.-dominated licensing boards define what constitutes legitimate medicine. In 1938, students of homeopathic, osteopathic, and chiropractic medical schools could no longer qualify for licensing as medical doctors.14 Hospitals or medical schools that dared to employ them risked losing their approved status. Since licensing required internship from an approved hospital, loss of this status caused loss of students and interns necessary to run the hospital. (15) M.D.s who associated with the "cultists," shared facilities with them, or referred patients to them would be judged "unethical," thereby risking their own professional standing. (16) Relying on the advice of licensed M.D.s, insurance companies sometimes denied reimbursements to alternative practitioners, making their service much less affordable. (17) Alternative practitioners were frequently denied other privileges as well.18 So blatant were these discriminatory practices that in 1987 the American Medical Association (AMA) was found guilty under the antitrust laws of having "conspired to destroy the profession of chiropractic in the United States" by using the political power afforded them by licensing laws. (19)

Were we being protected from "quacks" by licensing laws that suppressed alternative therapies? My own experience suggests just the opposite. After suffering back pain for several years and having several M.D.s advise me to take muscle relaxants and live with the discomfort, a coworker recommended an osteopath who had helped him with a similar problem. My spine had been locked in an unnatural position, probably as a result of an accident that had occurred some years before. The osteopath was able to relieve the tension with a gentle adjustment. Although spinal manipulation used to be common practice among osteopaths, the chiropractors do most of it today. When my osteopath retired, he turned over his practice to a chiropractor. When an automobile injury resulted in whiplash some time later, I was very grateful to have this alternative therapy.

Several studies of workers' compensation records have indicated that chiropractic can be superior to medical treatment with respect to lost work time and expense of care for certain types of injury. (20) Chiropractic manipulation, like surgery and drug therapy, is an important medical specialty.

Evidently, the M.D.s have belatedly come to the same conclusion. Some physicians are beginning to learn and practice the spinal manipulation techniques developed by alternative practitioners. (21) In the 1960s, osteopaths were once again permitted to practice in approved hospitals, (22) possibly because the M.D.s had fled to the lucrative medical specialties, leaving a lack of general practitioners. (23) With such tacit admissions that these alternative specialties have a place in medical practice, one wonders how many people suffered needlessly over the past 75 years because licensing laws have suppressed alternative therapies.

The suppression of different medical practices by licensing laws can be overt, as with the osteopathic and chiropractic professions described above. The subtle suppression of new therapies may be even more devastating, however.

The role of nutrition in health and disease is a good illustration. After 20 years in medical research, seeking causes and cures, I've seen how difficult it is to give laboratory animals our most troublesome diseases. For example, when studying the protective effects of prostaglandins on alcoholic liver disease, an M.D. collaborator suggested that we use a dietdeficient in key nutrients to produce a similar syndrome in rats.24 A great deal of evidence suggests that alcohol damages the liver by inducing nutritional deficiencies. (25) Most of our peers, however, believed that a single study had conclusively shown that baboons fed a supposedly adequate diet could still develop liver damage when given alcohol. (26) The control animals gained weight during the years of the study, while the baboons getting alcohol did not. Nevertheless, few physician-researchers realized that the failure of the baboons to thrive suggested that the diet was not adequate. The laboratory that performed this study demonstrated many years later that lecithin, a component of many foodstuffs, was able to partially prevent the alcohol-induced damage and maintain normal weight! (27)

Such minimal awareness of nutritional basics is probably due to the poor training doctors receive in this area. Indeed, in 1990, only 34 of the accredited medical schools required a course devoted exclusively to nutrition. (28) Cardiovascular disease, which kills more people in the United States than any other ailment, is thought to be intimately linked with diet and lifestyle. We obviously need more doctors trained in nutrition, but licensing laws have prevented us from having significant choices other than those the medical monopoly lets us have.

The damage done by licensing laws is augmented further by the aggression of taxation, which is used to provide funding for medical research. Instead of allowing individuals to target the wealth they create toward the medical research that appeals to them, we have directed our government enforcement agents to confiscate it- at gunpoint, if necessary- in the form of taxes. Research proposals are evaluated by committees composed of established scientists and physicians.

Having served on such committees, I have seen why innovative ideas that do not fit main-stream thinking never get funded. Each evaluator gives the proposal a score; even a single low rating is enough to prevent funding. Research in osteopathy or chiropractic, therefore, receives little funding. Research in therapeutic nutrition is also severely limited. Even Linus Pauling, winner of the Nobel Prize for chemistry and for peace, has had difficulty obtaining federal funding for his research on the use of Vitamin C to treat cancer. (29)

Medicine is not as definitive as most people think. Less than 25% of medical procedures have been demonstrated to be useful in controlled clinical trials. (30) Such trials are time-consuming and expensive, and physicians are hesitant to withhold any therapy that might be beneficial just for the study's sake. This is why surgery involving coronary bypass, the most frequently performed major surgery in the United States, has only recently been shown to be worthwhile, and then only in a select group of heart patients. (31) As a result, many people over the years have undergone needless pain, expense, and risk by having an unnecessary bypass.

To some extent this situation is unavoidable, since rigorous proof of a procedure's efficacy takes time, which some patients do not have. However, through the licensing process, certain types of unproven procedures (e.g., surgery) are permitted, while others are arbitrarily banned as quackery. Such unscientific selection has often led to the comical situation of yesterday's quackery becoming tomorrow's cure!

Medicine is still in its infancy; there is much that we do not know. Like it or not, we are human guinea pigs for medical doctors and alternative practitioners alike. The aggression of licensing laws limits our options without protecting us from unproven cures.


History Repeats Itself as the Rich Get Richer with Our Help!

The dangers of licensing laws were well known to our ancestors who left Europe and its guild-style licensing system to settle in America, the "land of the free" (i.e., "free" from aggression). Licensing of doctors evolved in the early years of the United States, but was abandoned in the mid-1800s. Licensing had been found to exclude competent healers, hinder the development of alternative therapies (e.g., herbal medicine), create a monopoly of established practices (e.g., bleeding!), and retard innovative research.32 Isn't this reminiscent of the above description of today's medicine? If history clearly repeats itself with the aggression of licensing laws, why were they instituted once again in the twentieth century?

Licensing of physicians was largely a result of lobbying by the AMA. This is not at all unusual: licensing laws are usually requested, not by consumers complaining about the quality of service, but by the professionals themselves! Indeed, professional organizations are frequently founded with the sole purpose of lobbying for licensing laws. (33)

Why would service providers desire licensing laws designed to regulate them? Legislators turn to established service providers to determine what requirements new entrants must satisfy. Not surprisingly, the established practitioners suggest giving licenses to those already in practice, setting high standards for new entrants, and denying approval to practitioners who use different techniques from theirs. Most physicians supported such measures in the belief that the quality of health care would be improved. After all, the surgical and pharmaceutical therapies of modern medicine have indeed contributed to the 25-year increase in life expectancy gained in this century. (34) Nevertheless, some of the AMA leadership appeared to be well aware that fewer physicians meant higher income for those allowed to practice. (35) Evidence suggests that the pass-fail rate of qualifying examinations may even be adjusted by the licensing boards to keep numbers of service providers (including physicians) low. (36) Choice is diminished, and fees rise accordingly.

Since the AMA controls the licensing boards, it can influence the behavior of practicing physicians by threatening to revoke their licenses. Medical doctors giving discounts have been censured by the AMA to keep physicians' incomes high. (37) When acupuncture was introduced into the United States, the AMA attempted to restrict its use to licensed medical doctors. (38) Other practices that are just as adequately and more economically performed by paraprofessionals have been grounds for turf battles. (39)

Should we then blame the negative effects of physician licensing on those selfish others who set AMA policy? Of course not! The AMA leaders simply observed our willingness to use aggression-through-government for a good cause. Perhaps the last time we used aggression, the M.D.s were the victims. Like the serpent in the proverbial Garden of Eden, the AMA tempted us to use aggression against our neighbors. They only provided us with the spark the suggestion- of aggression. We fanned the flame into a raging inferno by instructing our government to enforce the decisions of the AMA-dominated licensing board. We were ready to deny our neighbor George access to the medical service of his choice because of our belief that better service for ourselves would result. We were content to have practitioners who did not follow the dictates of the licensing boards labeled as quacks even if their clients wanted their particular mode of healing. We yielded to the temptation to benefit ourselves by initiating force against others. The responsibility belongs to us.

The Poor Get Poorer: Discrimination Against the Disadvantaged

As usual, the poor suffer most from the aggression of licensing laws. Indeed, one of the concerns of those who spoke against it was that the poor would be deprived of medicalcare altogether as costs increased. Rural areas, which could no longer support a full-time physician, were abandoned. (9) The would-be practitioner coming from a disadvantaged background was also penalized. In 1910, there were seven medical schools specializing in training black physicians. By 1944, only two had survived. (40) Women were excluded from the medical profession in the same manner.

Most medical schools that catered to the working class by providing flexible training regimens, such as night school and apprenticeship, were closed. (41) Without the ability to work while they trained, aspiring physicians from the lower classes found themselves unable to afford the schooling or the time.

A Lose-Lose Situation

As usual, we reap as we sow. Licensing laws for physicians operate in much the same way that other licensing laws do. Those privileged to create wealth as physicians command higher prices than they otherwise would. The disadvantaged, less able to pay for medical care, take their turn as aggressors. They instruct the government enforcement agents to take wealth from the advantaged- at gunpoint, if necessary- to pay for their health care. The enforcement agents create no new wealth, so they must also take enough wealth from us for their support as well. Our piece of the Wealth Pie shrinks further.

Although the plight of the poor is most visible, the aggression of medical licensing laws hurts everyone. The greatest loss- the creation of wealth by economical, accessible, innovative medical therapies- is an invisible one. When we watch our loved ones die from "incurable" diseases, we pay dearly because of our refusal to honor our neighbor's choice!

The Easy Way Out

To expand our options for medical care, we need only to say "No!" to the aggression of licensing laws. We would then be faced with another concern: how would we evaluate the competence of our physicians or surgeons before placing our life in their hands?

Quality practitioners of many professions have realized that people will do without a service if they can't readily evaluate it, especially if a poor choice is associated with a high risk of injury. Therefore, enlightened service providers often seek voluntary certification or a "Seal of Approval" from a professional or consumers' organization. For example, the AMA might rate practitioners by a variety of criteria, giving "certification" or ratings to those who met their standards. If their ratings are appropriate, consumers will turn to them for guidance. Professionals seeking certification would happily pay a hefty fee for a certification that meant more business. The AMA would profit when it expanded, rather than limited, its membership! Truly, it's a win-win world!

However, the AMA would have to be careful not to certify carelessly. Otherwise, consumers would no longer give it credence, and professionals would seek another certifying organization that consumers trusted.

This natural regulation by the marketplace ecosystem increases the number of service providers in areas that use certification when compared to places without certification or with the aggression of licensing laws.1 Since the number of practitioners appears to be the primary determinant of how much quality service is actually delivered, voluntary certification should increase the availability of quality health care. Even if this were the only benefit derived from abandoning the aggression of licensing laws, our national health would be greatly enhanced. However, more quality care is only the beginning.

The skyrocketing costs of health care would plummet without the aggression of licensing. Today, health care professionals spend much of their time involved in activities that fail to use their skills fully. For example, numerous studies have shown that nurses and other non-physicians are able to diagnose and treat common conditions as competently as licensed medical doctors. (42) The fees charged by these non-physician professionals would be more than they receive today, but less than those charged by a physician today.

Pediatric nurses, for example, are able to give proper medical care to approximately two-thirds of all childhood cases, referring the remainder to physicians. (43) Nurses and other non-physician medical personnel can competently decide whether a respiratory ailment is a cold, an infection, or a more serious problem that needs a doctor's attention. (44) Nurses and other medical personnel could economically run clinics to monitor blood pressure, serum cholesterol, and glucose tolerance and could provide feedback to patients as they alter their lifestyles. Even minor surgery, such as suturing superficial wounds, can be competently performed by trained non-physicians.

As an undergraduate, I met a man recently back from Vietnam who hoped to go to medical school once he graduated from college. Because the army never had enough physicians available for the large numbers of wounded, he often found himself performing emergency surgery in an attempt to save soldiers otherwise doomed to bleed to death. This individual was obviously quite capable of creating wealth by assisting in a hospital operating or emergency room, or by suturing superficial wounds. However, until he completed medical school, he was unable to use the skills he had. Many veterinary or laboratory personnel are competent surgeons but are currently forbidden by law to perform even the simplest procedures on people.

If these skilled individuals were able to assist surgeons or treat uncomplicated cases, the cost of routine medical care would godown. Lower cost would make health care more accessible, especially to the poor, thereby increasing the overall amount of quality care delivered. Quality would be maintained, because less skilled practitioners could refer difficult cases to those with more training. Instead of being overburdened with routine care, medical doctors could focus on pushing back the frontiers of medicine. They could still enjoy hefty fees for state-of-the-art medical skills, while routine medical services would be provided more economically by non-physician practitioners.

Hospitals and medical centers could hire individuals for their skills, regardless of where, when, and how they received their education. Training for medical practitioners of all kinds would be as diverse as potential job niches. Individuals could once again apprentice, attend part-time medical schools, or develop their own therapies.

Not only would traditional care become more readily available at a lower cost, but new paradigms of healing would be readily available. People whose conditions warranted treatment by a non-traditional medical practitioner would be able to accept the risks and benefits of doing so. Such individuals would voluntarily provide a valuable service to us all as they helped to determine the value of each new treatment.

Such people might be putting themselves at risk as they try new therapies. However, we all acknowledge that life is not risk free. Between 40,000 to 50,000 people are killed each year in automobile accidents, (12) yet we do not outlaw driving. Everyone decides whether the benefits of driving outweigh the risks. We should honor our neighbor's choice of new medical therapies as well.

By saying "No!" to the aggression of licensing laws, we increase the overall health care quality by increasing availability, decreasing price, encouraging innovation, and allowingfull use of each individual's skills. How we benefit when we honor our neighbor's choice! It's truly a win-win world!

The benefits of health care deregulation could be sabotaged by the aggression of fraud. Practitioners who attempt to deceive patients by making false claims of certification or qualifications perturb the natural balance of the marketplace ecosystem, just as surely as aggression-
through- government does. Chapter 13 (The Other Piece of the Puzzle) explains how to deal effectively with aggressors without becoming aggressors ourselves. We'll see how the second principle of non-aggression, righting our wrongs, restores the balance while rehabilitating and, more importantly, deterring aggressors. Before examining this concept in detail, however, more exploration of our aggression is in order.

In the next chapter, as we explore the harm done by licensing products instead of people, we'll find that we can measure the costs in thousands upon thousands of lives!

 

 

 

 

 

...mainly the research refutes the claim that licensing protects the public.

- Stanley Gross, Professor of Psychology, Indiana State University

 

 

...most of the evidence suggests that licensing has, at best, a neutral effect on quality and may even cause harm to the consumers.

- S. David Young, RULE OF EXPERTS

 

The higher entry standards imposed by licensing laws reduce the supply of professional services... The poor are net losers, because the availability of low-cost service has been reduced. In essence, the poor subsidize the information research costs of the rich.

- S. David Young, THE RULE OF EXPERTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

...restricting the practice of what is called medicine and confining it... to a particular group, who in the main have to conform to the prevailing orthodoxy, is certain to reduce the amount of experimentation that goes on and hence to reduce the rate of growth and knowledge in the area.

- Milton Friedman, Nobel Prize winner, Economics

 

 

...by proper orthomolecular measures, mostly nutritional, it is possible for people to extend the length of the period of both life and well-being by about 25 years.

- Linus Pauling, Nobel Prize winner, Chemistry

 

Phony "youth cures"... includes products to soften the skin, to "make the person feel young again," to remove brown spots and cellulite. Of course, there is no product that will work in this way any more than there is a product known to medical science that retards baldness or helps grown hair back on a bald scalp.

- CONGRESSIONAL REPORT ON QUACKERY, 1982

 

Upjohn has introduced Rogaine... as the "first prescription medication proven effective for male pattern baldness."

- Scrip, 1986

 

 

 

...state licensing boards, particularly for medicine, but also for other professions, have instead become first and foremost devices for protecting the monopolistic position of the professionals.

- Marie Haus, REGULATING THE PROFESSIONS

 

...an oversupply of doctors threatens... perhaps there is need for professional birth control.

- Journal of the American Medical Association, 1932

 

As you increase the cost of the license to practice medicine, you increase the price at which the medical service must be sold and you correspondingly decrease the number of people who can afford to buy the service.

- William Allen Pusey, AMA President, 1927

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The proportion and absolute number of women physicians was greater in 1910 than in 1950.

- Stanley J. Gross, Professor of Psychology, Indiana State

 

...the study of medical history indicates that quacks flourish whenever physicians are scarce or when their remedies are ineffective. Licensing laws may actually worsen this problem by artificially restricting the supply of practitioners.

- S. David Young, THE RULE OF EXPERTS

 

 

 

 

Certification provides all the information of licensure while offering a wider choice set.

- Keith B. Leffler, Journal of Law & Economics